Elmira Savings Bank Reports First Quarter Earnings

Rhea-AI Summary

Elmira Savings Bank (NASDAQ: ESBK) reported a net income of $1,168,000 for Q1 2022, a decline of 3.0% from $1,204,000 in Q1 2021. Diluted earnings per share were $0.33, down from $0.34. The bank's return on average assets improved slightly to 0.76%, while return on average equity decreased to 7.32%. Total assets fell by 3.0% to $613.4 million, with a 3.3% drop in deposits. The bank’s net interest margin decreased to 3.46%. Elmira is moving towards a merger with Community Bank, N.A., projected to finalize by May 13, 2022.

Positive

• Shareholders’ equity increased by $677,000 to $64.7 million.
• Book value per share rose to $18.16 from $18.02.

Negative

• Net income decreased by $36,000, or 3.0%, from the prior year.
• Net interest income dropped by $399,000.
• Noninterest income fell by $1,038,000, primarily due to a reduction in loan sales.
• Total assets decreased by $18.9 million or 3.0%.
• Deposits decreased by $17.6 million or 3.3%.
• Nonperforming loans to total loans ratio increased to 0.83%.

ELMIRA, N.Y., April 27, 2022 (GLOBE NEWSWIRE) -- Elmira Savings Bank (NASDAQ: ESBK)

Highlights

• Net income was $1,168,000 for the three months ended March 31, 2022, compared to $1,204,000 for the same period in 2021.
  
  
• Diluted earnings per share were $.33 per share for the three months ended March 31, 2022, compared to $.34 per share for the same period in 2021.
  
  
• Return on average assets was .76% for the three months ended March 31, 2022, and .75% for the same period in 2021.
  
  
• Return on average equity was 7.32% for the three months ended March 31, 2022, compared to 7.93% for the same period in 2021.
  

"Earnings per share and return on assets are consistent with last year’s first quarter, as we work diligently towards the merger and integration with Community Bank, N.A, which is expected to take place in the second quarter," said Thomas M Carr, President and CEO.

Net Income

Net income totaled $1,168,000 for the three months ended March 31, 2022, a decrease of $36,000 or 3.0% from the $1,204,000 recorded for the same period in 2021. This decrease was the net result of a decrease in net interest income of $399,000 and a decrease in noninterest income of $1,038,000, offset by a decrease in the provision for loan losses of $150,000, a decrease in noninterest expense of $1,177,000, and a decrease in tax expense of $74,000.

Basic and diluted earnings per share for the three months ended March 31, 2022 were both $.33 per share compared to $.34 per share for both for the same period in 2021.

The decrease in noninterest income for the three months ended March 31, 2022 is primarily due to a decrease in the gain on sale of loans, reflecting lower levels of residential mortgages originated for sale to the secondary markets compared to the same period in 2021. The decrease in noninterest expense for the three months ended March 31, 2022 reflects lower levels of salaries and benefits, occupancy expense, and all other expense categories. The lower levels of salaries and benefits and all other expense categories relate to staffing reductions and controlled spending reductions leading up to the upcoming merger.

Net Interest Margin

The net interest margin for the three months ended March 31, 2022 was 3.46% compared to 3.57% for the first quarter of 2021. The yield on average earning assets was 3.79% for the three months ended March 31, 2022, compared to 4.29% for the same period in 2021. The average cost of interest-bearing liabilities was 0.36% for the three months ended March 31, 2022, compared to 0.79% for the three months ended March 31, 2021.

Assets

Total assets decreased $18.9 million or 3.0% to $613.4 million at March 31, 2022, compared to $632.2 million at December 31, 2021. Loans receivable decreased 1.4% to $457.9 million at March 31, 2022, compared to December 31, 2021. The available-for-sale investment portfolio decreased $470,000 from December 31, 2021 to March 31, 2022, and cash and cash equivalents decreased by $10.7 million from December 31, 2021 to March 31, 2022. The decrease in cash resulted primarily from a $17.6 million decrease in deposits.

Nonperforming Loans

Our nonperforming loans to total loans ratio was 0.83% at March 31, 2022, and 0.70% at December 31, 2021. Net loan charge-offs to average loans for the three months ended March 31, 2022 was .05% and .03% for the three months ended March 31, 2021. The allowance for loan losses was 1.22% of total loans at March 31, 2022 and 1.21% at December 31, 2021.

Liabilities

Deposits totaled $523.4 million at March 31, 2022, a decrease of $17.6 million or 3.3% from the December 31, 2021 total of $541.0 million. Borrowed funds decreased by $2.0 million from December 31, 2021 to $20.0 million at March 31, 2022.

Shareholders’ Equity

Shareholders’ equity increased $677,000 to $64.7 million at March 31, 2022 compared to December 31, 2021. The current level of shareholders’ equity equates to a book value per share of $18.16 at March 31, 2022, compared to $18.02 at December 31, 2021. Dividends paid to common shareholders were $0.15 for the three months ended March 31, 2022 and March 31, 2021.

Elmira Savings Bank, with $613.4 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with five offices in Chemung County, NY; three offices in Tompkins County, NY; two offices in Steuben County, NY; one office in Cayuga County, NY; one office in Schuyler County; and a loan center in Broome County, NY.

On October 4, 2021, Elmira Savings Bank, in a joint press release with Community Bank System, Inc. (NYSE: CBU), announced that it had entered into a definitive agreement to be acquired by Community Bank System’s bank subsidiary, Community Bank, N.A. for approximately $82.8 million in cash. Community Bank System, with reported assets of over $15.3 billion, is headquartered in DeWitt, New York and is among the country’s 125 largest banking institutions. On December 14, 2021, at a Special Shareholders Meeting the shareholders of Elmira Savings Bank approved the merger with more than 98% of the votes cast in favor of the merger. On April 22, 2022, Community Bank, N.A. announced that it had received regulatory approvals to complete its merger with Elmira Savings Bank. The acquisition is expected to be complete effective close of business May 13, 2022, subject to customary closing conditions and approval from the New York State Department of Financial Services.

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve the risks and uncertainties, including the timely availability and acceptance of Bank products, the impact of competitive products and pricing, the management of growth, and other risks detailed from time to time in the Bank’s regulatory reports.

For further information contact:
Thomas M. Carr, President & CEO
Elmira Savings Bank
333 East Water Street
Elmira, New York 14901
(607) 735-8660
tcarr@elmirasavingsbank.com

ELMIRA SAVINGS BANK
CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands, except for share and per share data)	March 31,				December 31,
	2022				2021				% Change
ASSETS
Cash and due from banks	$	90,905			$	99,785			-8.9	%
Federal funds sold and other short-term investments		195				2,058			-90.5	%
Total cash and cash equivalents		91,100				101,843			-10.5	%
Securities available for sale, at fair value		3,639				4,109			-11.4	%
Securities held to maturity - fair value $5,982
at March 31, 2022, and $6,315 at December 31, 2021		5,992				6,080			-1.4	%
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost		7,975				8,087			-1.4	%
Loans held for sale		435				2,374			-81.7	%
Loans receivable		457,900				464,246			-1.4	%
Less: Allowance for loan losses		5,569				5,620			-0.9	%
Net loans		452,331				458,626			-1.4	%
Premises and equipment, net		16,397				15,558			5.4	%
Bank-owned life insurance		16,019				15,914			0.7	%
Accrued interest receivable		1,376				1,380			-0.3	%
Goodwill		12,320				12,320			0.0	%
Other assets		5,787				5,941			-2.6	%
Total assets	$	613,371			$	632,232			-3.0	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits	$	523,402			$	540,999			-3.3	%
Borrowings		20,000				22,000			-9.1	%
Other liabilities		5,315				5,256			1.1	%
Total liabilities		548,717				568,255			-3.4	%
Shareholders' equity:
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares authorized;
10,000 shares issued and none outstanding at March 31, 2022 and at December 31, 2021		9,700				9,700			0.0	%
Common stock, $1 par value; authorized 5,000,000 shares; 3,651,426 shares issued and 3,557,543 outstanding
at March 31, 2022 and 3,641,487 shares issued and 3,547,604 outstanding at December 31, 2021		3,651				3,641			0.3	%
Additional paid-in capital		54,551				54,421			0.2	%
Retained earnings		8,922				8,288			7.6	%
Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares
at March 31, 2022 and December 31, 2021		(12,202	)			(12,202	)		0.0	%
Accumulated other comprehensive (loss) income		(18	)			79			-122.8	%
Total Elmira Savings Bank shareholders' equity		64,604				63,927			1.1	%
Noncontrolling interest		50				50			0.0	%
Total shareholders' equity		64,654				63,977			1.1	%
Total liabilities and shareholders' equity	$	613,371			$	632,232			-3.0	%

ELMIRA SAVINGS BANK
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
	Three Months Ended
	March 31,
(in thousands, except for per share data)	2022				2021				% Change
Interest and dividend income:
Interest and fees on loans	$	4,338			$	5,212			-16.8	%
Interest and dividends on securities
Taxable		112				143			-21.7	%
Non-taxable		62				69			-10.1	%
Total interest and dividend income		4,512				5,424			-16.8	%
Interest expense:
Interest on deposits		250				725			-65.5	%
Interest on borrowings		140				178			-21.3	%
Total interest expense		390				903			-56.8	%
Net interest income		4,122				4,521			-8.8	%
Provision for loan losses		-				150			-100.0	%
Net interest income after provision for loan losses		4,122				4,371			-5.7	%
Noninterest income:
Service fees		302				308			-1.9	%
Gain on sale of loans held for sale		255				1,211			-78.9	%
Other service fees		201				210			-4.3	%
Earnings on bank-owned life insurance		105				101			4.0	%
Other		24				95			-74.7	%
Total noninterest income		887				1,925			-53.9	%
Noninterest expense:
Salaries and benefits		1,761				2,307			-23.7	%
Net occupancy		412				626			-34.2	%
Equipment		390				442			-11.8	%
Marketing and public relations		92				241			-61.8	%
Professional fees		87				147			-40.8	%
Other		781				937			-16.6	%
Total noninterest expense		3,523				4,700			-25.0	%
Income before income taxes		1,486				1,596			-6.9	%
Income taxes		318				392			-18.9	%
Net income		1,168				1,204			-3.0	%
Less: Net income attributable to noncontrolling interest		-				-			-
Net income attributable to Elmira Savings Bank	$	1,168			$	1,204			-3.0	%
Basic earnings per share	$	0.33			$	0.34			-2.9	%
Diluted earnings per share	$	0.33			$	0.34			-2.9	%
Weighted average shares outstanding - basic		3,533,077				3,514,650			0.5	%
Weighted average shares outstanding - diluted		3,560,126				3,515,256			1.3	%
Dividends per share	$	0.15			$	0.15			0.0	%

ELMIRA SAVINGS BANK
AVERAGE BALANCES AND INTEREST RATES
(Dollars in Thousands)	For the Three Months Ended
	March 31, 2022											March 31, 2021
ASSETS:	Average Balance				Interest				Average Rate			Average Balance				Interest				Average Rate
Loans	$	458,353			$	4,338			3.80	%		$	485,646			$	5,212			4.31	%
Short-term investments		1,781				-			0.06				617				-			0.02
Securities		18,025				174			3.89				21,267				212			4.01
Total interest-earning assets		478,159				4,512			3.79				507,530				5,424			4.29
Noninterest-earning assets		143,931											140,728
TOTAL ASSETS	$	622,090										$	648,258
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits	$	414,018			$	250			0.24			$	436,731			$	725			0.67
Borrowings		21,978				140			2.55				26,933				178			2.65
Total interest-bearing liabilities		435,996				390			0.36				463,664				903			0.79
Noninterest-bearing liabilities		121,433											123,014
Shareholders' equity		64,661											61,580
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	622,090										$	648,258
Interest rate spread									3.43	%										3.50	%
Net interest income/margin					$	4,122			3.46	%						$	4,521			3.57	%

							Quarter Ended
(Dollars in Thousands, Except Per Share Data)		3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Operating Data
Net income	$	1,168		$	1,102		$	1,511		$	1,402		$	1,204
Net interest income		4,122			4,437			4,708			4,340			4,521
Provision for loan losses		-			-			-			-			150
Non-interest income, ex. Net security gains		887			1,158			1,564			1,347			1,925
Non-interest expense		3,523			4,187			4,307			3,904			4,700
Performance Statistics
Net interest margin		3.46	%		3.65	%		3.81	%		3.48	%		3.57	%
Annualized return on average assets		0.76	%		0.69	%		0.92	%		0.86	%		0.75	%
Annualized return on average equity		7.32	%		6.82	%		9.49	%		9.03	%		7.93	%
Annualized net loan charge-offs to avg loans		0.05	%		0.01	%		0.14	%		0.06	%		0.03	%
Net charge-offs		52			7			164			74			40
Efficiency ratio		70.3	%		74.8	%		68.7	%		68.6	%		72.9	%
Per Share Data
Basic earnings per share	$	0.33		$	0.31		$	0.43		$	0.40		$	0.34
Diluted earnings per share		0.33			0.31			0.43			0.40			0.34
Dividend declared per share		0.15			0.15			0.15			0.15			0.15
Book value		18.16			18.02			17.86			17.57			17.34
Common stock price:
High		23.00			23.22			14.75			15.05			15.96
Low		22.69			13.50			12.80			13.23			11.48
Close		22.93			22.84			13.34			14.31			13.50
Weighted average common shares:
Basic		3,533			3,526			3,522			3,519			3,515
Fully diluted		3,560			3,553			3,524			3,520			3,515
End-of-period common shares:
Issued		3,651			3,641			3,641			3,641			3,636
Treasury		94			94			94			94			94
Financial Condition Data:
General
Total assets	$	613,371		$	632,232		$	643,596		$	648,686		$	659,333
Loans, net		452,331			458,626			458,631			465,271			476,383
Intangibles		12,320			12,320			12,320			12,320			12,320
Total deposits		523,402			540,999			544,763			551,245			562,893
Noninterest-bearing		115,680			122,268			118,511			121,534			121,101
Savings		99,642			97,479			95,299			93,351			87,228
NOW		109,999			112,519			114,514			111,343			111,414
Money Market		30,233			34,626			36,577			32,624			35,011
Time deposits		167,848			174,107			179,862			192,393			208,139
Total interest-bearing deposits		407,722			418,731			426,252			429,711			441,792
Shareholders' equity		64,654			63,977			63,396			62,375			61,462
Asset Quality
Non-performing assets	$	4,173		$	3,675		$	3,645		$	5,023		$	5,602
Non-performing assets to total assets		0.68	%		0.58	%		0.57	%		0.77	%		0.85	%
Allowance for loan losses		5,569			5,620			5,627			5,791			5,865
Allowance for loan losses to total loans		1.22	%		1.21	%		1.21	%		1.23	%		1.22	%
Allowance for loan losses to
non-performing loans		148.98	%		174.37	%		175.95	%		116.12	%		108.63	%
Non-performing loans to total loans		0.83	%		0.70	%		0.70	%		1.07	%		1.13	%
Capitalization
Shareholders' equity to total assets		10.54	%		10.12	%		9.85	%		9.62	%		9.32	%

FAQ

What were Elmira Savings Bank's earnings for Q1 2022?

Elmira Savings Bank reported a net income of $1,168,000 for Q1 2022.

How did diluted earnings per share change for ESBK in Q1 2022?

Diluted earnings per share were $0.33 in Q1 2022, down from $0.34 in Q1 2021.

What is the current status of the merger between Elmira Savings Bank and Community Bank, N.A.?

The merger is expected to close on May 13, 2022, pending regulatory approvals.

What is the net interest margin for Elmira Savings Bank in Q1 2022?

The net interest margin was 3.46% for Q1 2022.

How much did Elmira Savings Bank's total assets decrease by in Q1 2022?

Total assets decreased by $18.9 million, or 3.0%, to $613.4 million.